By Haywood                                            S.B. No. 1746
         77R37 QMS-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to exempting computers and computer repairs from the sales
 1-3     tax.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Chapter 151, Tax Code, is amended by adding
 1-6     Section 151.355 to read as follows:
 1-7           Sec. 151.355.  COMPUTERS. A computer or a component of a
 1-8     computer is exempted from the taxes imposed by this chapter.
 1-9           SECTION 2. Section 151.0101(a), Tax Code, as amended by
1-10     Chapters 394 and 405, Acts of the 76th Legislature, Regular
1-11     Session, 1999, is amended to read as follows:
1-12           (a)  "Taxable services" means:
1-13                 (1)  amusement services;
1-14                 (2)  cable television services;
1-15                 (3)  personal services;
1-16                 (4)  motor vehicle parking and storage services;
1-17                 (5)  the repair, remodeling, maintenance, and
1-18     restoration of tangible personal property, except:
1-19                       (A)  aircraft;
1-20                       (B)  a ship, boat, or other vessel, other than:
1-21                             (i)  a taxable boat or motor as defined by
1-22     Section 160.001;
1-23                             (ii)  a sports fishing boat; or
1-24                             (iii)  any other vessel used for pleasure;
 2-1                       (C)  the repair, maintenance, and restoration of
 2-2     a motor vehicle; [and]
 2-3                       (D)  the repair, maintenance, creation, and
 2-4     restoration of a computer program, including its development and
 2-5     modification, not sold by the person performing the repair,
 2-6     maintenance, creation, or restoration service; and
 2-7                       (E)  a computer or a component of a computer;
 2-8                 (6)  telecommunications services;
 2-9                 (7)  credit reporting services;
2-10                 (8)  debt collection services;
2-11                 (9)  insurance services;
2-12                 (10)  information services;
2-13                 (11)  real property services;
2-14                 (12)  data processing services;
2-15                 (13)  real property repair and remodeling;
2-16                 (14)  security services;
2-17                 (15)  telephone answering services; [and]
2-18                 (16)  Internet access service; and [.]
2-19                 (17) [(16)]  a sale by a transmission and distribution
2-20     utility, as defined in Section 31.002, Utilities Code, of
2-21     transmission or delivery of service directly to an electricity
2-22     end-use customer whose consumption of electricity is subject to
2-23     taxation under this chapter.
2-24           SECTION 3. (a)  This Act takes effect on the first day of the
2-25     first calendar quarter beginning on or after the date that it may
2-26     take effect under Section 39, Article III, Texas Constitution.
2-27           (b)  The change in law made by this Act does not affect taxes
 3-1     imposed before the effective date of this Act, and the law in
 3-2     effect before the effective date of this Act is continued in effect
 3-3     for purposes of the liability for and collection of those taxes.